SCHEDULE: Comscore Investors Exchange Preferred Stock for New Series C

Pine Investor and Cerberus Capital Management are exchanging their Series B Preferred Stock in Comscore for a new Series C Convertible Preferred Stock and Common Stock, subject to stockholder approval.

Summary

• Reporting Persons (Pine Investor, LLC and Cerberus Capital Management, L.P.) beneficially own 1,830,579 shares of Comscore Common Stock, representing 27.2% of the outstanding shares.
• This ownership includes 1,717,072 shares convertible from Series B Preferred Stock, 109,654 outstanding Common Stock shares, and 3,853 shares from vested deferred stock units.
• Comscore entered into Stock Exchange Agreements with Pine, Charter Communications Holding Company, LLC, and Liberty Broadband Corporation on September 26, 2025.
• Each Stockholder will exchange 31,928,301 shares of Series B Preferred Stock for 4,223,621 shares of new Series C Convertible Preferred Stock and 3,286,825 shares of Common Stock.
• The closing of the Exchange is subject to customary conditions, including Comscore stockholder approvals at an Issuer Stockholders Meeting.
• Comscore will make a one-time cash payment of $2,000,000 to each Stockholder on June 30, 2028, if the Closing occurs.
• Stockholders agreed to vote in favor of the Exchange, issuance of Series C Preferred and Common Stock, and a Certificate of Amendment to increase authorized shares.
• A Second Amended and Restated Stockholders Agreement will be entered into at Closing, outlining Board composition and voting restrictions.
• The Board will consist of seven directors: one designee from each Stockholder, one Additional Director, and three Unaffiliated Directors (including the CEO).
• Stockholders will vote any shares representing voting power in excess of 49.99% in a neutral manner.
• Transfer restrictions apply to Exchange Common Stock and Common Stock from Series C conversion for six months, unless the price is $12.50 or more per share.
• Standstill restrictions apply to Stockholders owning 5% or more of Common Stock (as-converted).
• Other Stockholders have a right of first refusal on transfers of Series C Preferred or Common Stock.
• Charter has a right of first offer/refusal on patent sales.
• Prior written consent of each Stockholder is required for certain actions if they own at least 10% of Common Stock (as-converted).
• The Registration Rights Agreement will be amended to include Series C Preferred Stock and its underlying Common Stock as 'Registrable Securities.'
• Series C Preferred Stock will rank senior to Common Stock for dividends and liquidation, junior to indebtedness, with a liquidation preference of $14.50 per share.
• Series C holders can convert to Common Stock at their option, subject to a 49.99% beneficial ownership cap.
• Mandatory conversion of up to 1/6th of Series C shares can occur if VWAP exceeds Mandatory Conversion Price and Disinterested Directors direct it.
• In a change of control, Series C holders have a put option at liquidation preference, and Comscore has a call option. Unpaid amounts accrue interest at 9.5% per annum.
• Series C holders initially have one vote per share, voting with Common Stock, but voting rights are capped at 16.66% of Common Stock (as-converted) for each Stockholder, with excess votes exercised neutrally by the Issuer.

Sentiment

Score: 6

Explanation: The filing describes a complex restructuring of investor holdings and governance. While it clarifies the capital structure and investor rights, the immediate financial impact on the company's operations or profitability is not directly detailed. The one-time cash payment to stockholders is a future obligation. The transaction is a strategic realignment rather than a clear positive or negative operational development.

Positives

• The exchange simplifies the capital structure by converting Series B Preferred Stock into a new Series C Preferred Stock and Common Stock.
• The new Series C Preferred Stock has a liquidation preference equal to the purchase price ($14.50 per share), providing a clear value floor for these investors.
• The agreement includes a one-time cash payment of $2,000,000 to each Stockholder on June 30, 2028, providing a future cash inflow for these investors.
• The new governance structure, including Board composition with Unaffiliated Directors, could enhance independent oversight.
• The Registration Rights Agreement amendment will facilitate future liquidity for Series C Preferred and underlying Common Stock.

Negatives

• The transaction is subject to stockholder approvals, introducing uncertainty regarding its completion.
• The 9.5% interest rate on unpaid Change of Control Put/Call amounts is a significant cost if the Issuer defaults.
• The voting cap for Series C Preferred Stockholders (16.66% per Stockholder, with excess voted neutrally by Issuer) limits their direct influence despite significant ownership.
• The requirement for prior written consent from Stockholders owning at least 10% of Common Stock for certain actions could limit management's flexibility.
• The one-time cash payment to stockholders on June 30, 2028, represents a future cash outflow for Comscore.

Risks

• Failure to obtain required stockholder approvals for the Exchange, issuance of Series C Preferred Stock, and Certificate of Amendment could prevent the transaction from closing.
• The Issuer's ability to make the one-time cash payment of $2,000,000 to each Stockholder on June 30, 2028, is a future financial obligation.
• The 9.5% per annum interest rate on unpaid Change of Control Put or Call amounts could significantly increase the Issuer's liabilities in such an event.
• The restrictions on transfer of Exchange Common Stock and Common Stock from Series C conversion for six months, or below a $12.50 per share price, could impact liquidity for Stockholders.
• The standstill restrictions on Stockholders could limit their ability to influence corporate strategy or pursue alternative transactions.
• The requirement for Stockholder consent for certain enumerated actions could impede the Issuer's operational and strategic flexibility.

Future Outlook

The filing outlines a strategic restructuring of significant investor holdings in Comscore, converting existing Series B Preferred Stock into a new Series C Convertible Preferred Stock and additional Common Stock. This move, contingent on stockholder approval, aims to redefine the relationship between Comscore and its major investors, including new governance arrangements and potential future liquidity events for the new Series C shares. The one-time cash payment to stockholders in 2028 also indicates a long-term financial commitment tied to the successful closing of this exchange.

Management Comments

• The Issuer is obligated to take all necessary action to ensure the Board and certain committees consist of the individuals set forth in the Second Amended Stockholders Agreement immediately following the Closing.

Industry Context

This transaction reflects a common strategy in the media measurement and analytics industry where strategic investors often hold significant, complex equity stakes. The restructuring of preferred stock into a new series with specific conversion rights, voting caps, and board representation is a mechanism to balance investor influence with corporate governance, particularly in companies undergoing strategic shifts or seeking to optimize their capital structure. The involvement of major players like Charter and Liberty Broadband underscores the strategic importance of Comscore's data and services within the broader media ecosystem.

Comparison to Industry Standards

• The conversion of preferred stock to a new series with specific governance rights is a common practice in venture-backed or strategically invested companies, similar to structures seen in companies like Nielsen Holdings plc during its private equity acquisition or other data analytics firms with significant institutional backing.
• The 49.99% beneficial ownership cap and 16.66% voting threshold for Series C holders are typical mechanisms to prevent any single investor from gaining outright control while still allowing for significant influence, often observed in companies with multiple large strategic investors to maintain a balance of power.
• The inclusion of a right of first refusal for other stockholders on transfers of Series C or Common Stock, and Charter's right of first offer/refusal on patents, are standard protective provisions for strategic investors, comparable to agreements in technology and media joint ventures or partnerships.
• The $12.50 per share minimum transfer price for certain common stock within six months is a common lock-up provision, often seen in private equity exits or secondary offerings to stabilize the stock price post-transaction, similar to those implemented by companies like Roku, Inc. or Magnite, Inc. following significant capital events.

Management Changes

Corporate Governance

Related Party Transactions

• The Stock Exchange Agreements, Stockholder Support Agreements, and Second Amended and Restated Stockholders Agreement are between Comscore and its major stockholders (Pine Investor, LLC, Cerberus Capital Management, L.P., Charter Communications Holding Company, LLC, and Liberty Broadband Corporation), constituting related party transactions.

Stakeholder Impact

• **Shareholders (Common Stockholders)**: The transaction introduces a new class of preferred stock (Series C) and alters the capital structure. The voting caps on Series C holders and the board composition changes could influence future corporate direction and shareholder value. The requirement for stockholder approval means common stockholders will have a direct say in the transaction.
• **Preferred Stockholders (Series B)**: These stockholders (Pine, Charter, Liberty) are directly impacted as their Series B Preferred Stock is being exchanged for Series C Preferred Stock and Common Stock, redefining their investment terms and governance rights.
• **Management/Board**: The new governance structure, including specific board composition and consent rights for major stockholders, will directly impact the Board's decision-making processes and management's strategic flexibility.
• **Creditors**: The Series C Preferred Stock ranks junior to all secured and unsecured indebtedness, meaning creditors' positions are not directly subordinated by this new equity class.

Next Steps

• Hold an Issuer Stockholders Meeting to obtain required stockholder approvals for the Exchange, issuance of Series C Preferred Stock, and Certificate of Amendment.
• Enter into the Second Amended and Restated Stockholders Agreement at the Closing.
• Amend the Registration Rights Agreement at the Closing.
• File the Certificate of Designations for the Series C Preferred Stock at the Closing.
• Make a one-time cash payment of $2,000,000 to each Stockholder on June 30, 2028, if the Closing occurs.

Key Dates

Recommendation

The filing details a significant restructuring of Comscore's capital and governance structure involving major investors. While it clarifies investor rights and board composition, the immediate operational or financial performance implications are not clear. The transaction is subject to stockholder approval, introducing uncertainty. Investors should hold to observe the successful completion of the exchange and its subsequent impact on the company's strategic direction and financial performance before making further investment decisions.

Keywords

Comscore, SEC Filing, Schedule 13D, Preferred Stock, Common Stock, Stock Exchange Agreement, Series B Preferred, Series C Preferred, Corporate Governance, Stockholder Agreement, Voting Rights, Capital Structure, Investment, Cerberus Capital Management, Pine Investor, Charter Communications, Liberty Broadband